Voima Weekly #13 – Silver Linings

1 markka from 1854

In Weekly #2¹ I wrote about how well gold has preserved — and even strengthened — its purchasing power compared to the nominal value of the Finnish markka minted in 1879. Now, let’s look at silver in the same way — first from a historical perspective, then through its recent price movements, and finally with a glance toward what the future might hold.

In the 19th century, a bimetallic standard was in use, where both gold and silver functioned as money. But whenever their value ratio shifted, people quickly switched from one to the other — paying with the cheaper metal and saving the more valuable one.² Silver was the metal of the people, gold the metal of nations — and as the world became more connected, the people followed the nations. The final blow to the silver standard came with the large silver discoveries of the 1870s and Germany’s adoption of the gold standard, which prompted others to follow.³ Silver lost its role as monetary metal but found a new life in industry.

In the early 20th century, silver’s use expanded with the rise of electricity and photography, and after World War II it became an essential material in electronics, relays, and soldering. When film disappeared, its place was taken by solar panels, electric vehicles, and microelectronics. Today, over half of all silver is used in industry — it has shifted from money to material, yet remains just as indispensable as before.⁴

The coin in the picture is a 1 markka from 1864, dating back to the period when Finland was on the silver standard. At the time, one markka roughly equaled a day’s wage, and a loaf of bread cost only a few pennies.⁵ Today, the price of silver stands at €1,386 per kilogram, and the coin weighs 5.18 grams, of which 86.8% is silver — about 4.5 grams of pure metal (“94.48 pieces per pound of fine silver”). The metal value alone is now about €6.24, whereas the coin’s nominal value, converted into euros, is only €0.17.⁶ That corresponds to an average annual return (CAGR) of roughly 2.26% over more than 160 years. Of course, its collector’s value adds another €160–200, but measured purely as metal, silver has not performed particularly well over that period. Still, it has clearly preserved its value when compared with the nominal markka — €0.17 → €6.24. Over more than a century, the difference has become evident: in the late 1800s, one markka bought a kilogram of butter, whereas today it takes about eight euros to buy the same.⁷

Does this tell us anything? Perhaps only that, over the long run, silver too has preserved value better than government-issued nominal money — but not much more than that. Silver’s average annual return (CAGR) in dollar terms has been about 5.0% between 1975 and 2025.⁸ That’s a reasonable figure, but given its volatility and long periods of weakness, silver has not been a particularly reliable store of value or practical form of money.

The history of silver has been a rollercoaster. In February 1980, the price briefly hit $35.75 per troy ounce when the Hunt brothers tried to corner the market. Then COMEX changed its rules, and the crash began.⁹ By October, silver had fallen to $19/oz and by 1982 to just over $5/oz, where it lingered for almost 22 years. In August 2011, the price climbed again to $40/oz — back to its nominal 1980 level — but fell once more to around $14/oz by 2016. Since then, it has risen to its current all-time high of about $50/oz, or roughly €1,400 per kilogram. Over a span of more than half a century, silver has thus risen from around €100 to nearly €1,400 per kilogram — yet the journey has been full of spectacular surges and decades of silence. The returns have been modest, but the story remains captivating: silver has never made ordinary people rich — but it has endured.

Is silver’s story different this time? From India come reports of soaring demand,¹⁰ and according to the Silver Institute,¹¹ global silver consumption has long exceeded supply. Renewable energy technologies — solar panels, electric vehicles, and electronics — are consuming more silver than ever before. Still, it’s harder to see silver becoming a safe haven in the 2020s in the same way as gold. Gold can now be bought digitally, even in ten-euro fractions (digital gold = physical gold represented digitally), removing much of the practical need for silver as a substitute. In addition, silver has recently seen a sharp short squeeze — short positions have been elevated for a long time, and as they are closed at a loss, prices rise violently.¹² The ride is rough, and the coming months will show whether this peak will hold — or merely set the stage for an even greater rise. That may be silver’s true silver lining: resilience without glamour. Time may tarnish the surface — but clearly not its significance.

–Marko Viinikka
Founder, CEO
Voima Gold Oy

1 Voima Weekly #2

2 Gresham’s Law: A financial principle dating back to the 16th century, stating that “bad money drives out good.” When two forms of money share the same face value but differ in real value, people tend to spend the weaker one and hoard the more valuable.In the bimetallic systems of the 19th century, this meant that silver remained in circulation while gold disappeared.

3 Silver discoveries of the 19th century: Major finds in the United States (Comstock Lode, Nevada, 1859) and later in Mexico, Chile, and Australia sharply increased the global supply of silver during the 1860s and 1870s. The resulting oversupply drove down silver prices relative to gold and destabilized the bimetallic system. Germany’s adoption of the gold standard: The German Empire adopted the gold standard in 1871, following the Franco–Prussian War, financing the transition with war reparations paid by France in gold. The decision set an example for the rest of Europe and triggered a chain reaction: the Scandinavian Monetary Union (1873) and eventually Finland (1878) also moved to the gold standard.

⁴ According to the Silver Institute’s World Silver Survey 2024, industry accounted for 56% of total silver demand, consuming roughly 550 million ounces. The largest end-uses were electronics, soldering, solar panels, and electrical components in automobiles — with the green transition making silver one of the critical materials of the modern energy economy

⁵ Purchasing power of the markka in the 1860s: A worker’s daily wage was typically 0.8–1.2 markkaa, while a kilogram of rye bread cost around 0 08–0.12 markkaa. Sources: Statistical Yearbook of Finland, 1888; “Ask a Librarian” service summary on 19th-century Finnish price levels.

⁶ Calculation basis: The price of silver in October 2025 is approximately 1,386 per kilogram. A 1 markka coin from 1864 weighs 5.18 grams, of which 86.8% is silver, i.e. 4.5 grams of fine silver. 4.5 g × €1.386/g = 6.24. The nominal value in euros corresponds to the official conversion rate of the Finnish markka: 1 = 5.94573 mk → 1 mk = 0.168.

⁷ In the late 19th century, the price of butter in Finland was 1 markka per kilogram - although no exact source is available. In 2025, Valio butter, 500 g, salted, costs €7.98/kg (Prisma online store, October 2025).

⁸ www.silverprice.org

⁹ The attempt by the Hunt brothers to corner the silver market in 1979–80 is a well-documented episode in commodity history. Their accumulation of massive long positions and pressure on deliveries helped trigger a speculative bubble, which collapsed after exchanges like COMEX changed rules to restrict their leverage and force liquidations. Read more: www.britannica.com

¹⁰ Reuters

¹¹ Silver Institute

¹² FTC COT – Silver (COMEX).The most recent available disaggregated, futures-only data is from September 23, 2025: Managed Money long 51,225, short 14,126 (net +37,099); open interest 165,805. Weekly changes include, for example, Managed Money short –1,327 contracts (short covering). As of October 1, 2025, the CFTC announced that COT reports will not be published during the federal government shutdown; publication will resume in chronological order once the shutdown ends. The COT (Commitments of Traders) report shows the number of long and short positions held by different groups of market participants — such as hedge funds, producers, and speculators — in commodity derivatives. A large number of short positions can lead to a so-called short squeeze, when traders are forced to cover their positions at a loss, accelerating the price rise.

Disclaimer: Voima Weeklies are the personal writings of the undersigned. They do not necessarily represent the official view of Voima Gold Oy or any other company, nor do they constitute investment advice or a recommendation to purchase securities.